Finance
What is Dividends?
A dividend is a share of a company's profits paid out to its shareholders, usually in cash and on a regular schedule. It's one of the two main ways stocks make money for investors (the other is the share price rising).
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains dividends.
Key things to understand
- 1Companies pay part of their profits to shareholders as dividends.
- 2Usually paid quarterly, as an amount per share.
- 3Not all companies pay them — many growth companies reinvest instead.
- 4'Dividend yield' is the annual dividend as a percentage of the share price.
Frequently asked questions
- What is a dividend in simple terms?
- A cash payment a company makes to its shareholders out of its profits.
- Do all stocks pay dividends?
- No — many growing companies reinvest profits instead of paying dividends.
- What is dividend yield?
- The yearly dividend divided by the share price, shown as a percentage.